The UK banking sector has come a long way since the depths of the crisis two years ago. And with the Government now addressing the fiscal challenge facing the country, we are entering an important stage of our economic recovery.

We need to focus on how the UK can earn its way in the world.

This focus is made more difficult for the City because the failures of our banking system, and the public's understandable anger, risk obscuring a vital fact.

Sir Philip Hampton, chairman of RBS: 'Banks can be a huge asset to society, channelling the resources of savers to the needs of borrowers, protecting and serving both'

The UK has been a leader in financial services for centuries.

The sector has a pivotal role to play in providing jobs,
exporting services, contributing to the Government's deficit reduction,
and funding the economic recovery more broadly.

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The mistakes of our banking system in the years before the crisis were serious.

People rightly want to see that the banking system has been reformed and is connected to the needs of the economy.

The steps to fix the system for the long term are well in hand
and the UK banks have all strengthened their financial resources very
substantially.

Banks, governments, and citizens are addressing the lessons of the crisis. We all borrowed too much.

When deciding what further steps are necessary, we need a clear
and calm discussion about what went wrong and how to move forward.

That is exactly the discussion the Independent Commission on
Banking will be leading in an important public meeting today at the
David Hume Institute in Edinburgh.

The commission has been set up by the Government to examine
the causes of the crisis and to explore options for making the system
more resilient.

It will also validate or challenge the extensive reforms being
proposed or already implemented in the United Kingdom and
internationally.

The lessons we have learned at RBS are relevant for this
debate. We have a new team in place leading the bank and refocusing it
on helping our customers.

We know that our continued progress will allow the Government to start selling its shares in RBS.

That will be good news for taxpayers at a time of tight public finances and will be an important symbol of economic recovery.

So what are we doing to make that possible?

RBS has been getting on with the job of reducing its risk in
areas where it overreached and becoming a more focused, leaner, and
safer bank.

Our customers are at the heart of our recovery, which is why
we have launched customer charters for our retail and business clients,
promising to improve service and transparency.

We have to prove that we provide the best service to customers in order to keep and win their business.

We have kept lending to our customers. I know this is an issue Daily Mail readers care a lot about and rightly so.

At RBS we have approved 85 per cent of loan applications for small and
medium-sized firms and extended £40billion in new business loans last year.
We have the resources and the business need to support our customers.

One issue where banks have not been able to satisfy the public has been investment bankers' pay.

If we are not market-based on pay we will lose our best staff
and that will harm our performance and the value of the taxpayers'
investment.

But I can assure you that if our bankers' performance is down,
their performancerelated pay will be too - we intend to control all our
costs, including people costs, effectively and we will not reward
failure.

At RBS we are crystal clear that we exist to serve our customers and help our economic recovery.

Banks can be a huge asset to society, channelling the resources
of savers to the needs of borrowers, protecting and serving both.

I expect it will take time for us to earn the trust and respect of society again, but we are on the case.